Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I had a LL.M Taxation. I needed only to don my cape…. taxgirl® was born. Today, I live and work in Philadelphia, PA, one of the best cities in the world (I can't even complain about the sports teams these days). I landed in the City of Brotherly Love by way of Temple University School of Law. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. I even took the lead on a successful audit. At audit, opposing counsel read my report, looked at his file and said, “Gentlemen, she’s exactly right.” I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax.

In today’s game, every NFL franchise understands the importance of production and continuity at the quarterback position, and, historically, few franchises have enjoyed those benefits more than the Dallas Cowboys. We are very confident in this investment and commitment.

Who else was in the running? Baltimore Ravens quarterback Joe Flacco earned a Super Bowl ring, Pete Rozelle Trophy and a six-year, $120.6-million contract this year. That makes him the highest-paid player in NFL history. Maryland, however, has a so-called “millionaire’s tax” which imposes a higher tax on taxpayers in upper brackets. Flacco would likely be subject to a 5.75% tax on his earnings in the state of Maryland and a potential 2.75% local tax.

McNabb knows a little something about combined state and local tax burdens, too. In Philadelphia, McNabb would have been subject to federal income taxes at the top rate, plus state and local taxes. Philadelphia, like many municipalities, imposes a tax on income (earned and unearned) at the local level. City residents pay 3.928%; non-residents who work in the City pay 3.4985%. Together with the tax from the Commonwealth, McNabb would have likely paid close to $7 million in taxes for the same contract as Romo (to be fair, they have the same number of Super Bowl rings).

Residency means something when it comes to tax but it doesn’t mean everything. Throwing up a new manse in a tax free (or tax light) state doesn’t mean that you aren’t subject to taxes in other locales. Taxes can be imposed when you do business in another place – the legal concept of nexus or connection – even when you live somewhere else (just ask Usain Bolt and Rafael Nadal).

Athletes who can control both residency and venue often do. Filipino native and world champion boxer Manny Pacquiao, for example, recently made noise about boxing his next match in Macau instead of Vegas because doesn’t want to pay U.S. taxes. His manager defended the move, asking, “Manny can go back to Las Vegas and make $25 million, but how much of it will he end up with – $15 million?”

NFL players don’t have that luxury, however. Players are generally subject to tax wherever they play and practice – in cases where home field is located in a high tax area, it might not be such an advantage. That can result in a pretty convoluted tax computation, even if a player lives in an income tax free state otherwise.

When it comes to Romo, the quarterback has a lot of reasons to stay in Texas that aren’t tax related. He has a home and family in the Lone Star state – and a pretty considerable history. He’s played for the Cowboys for about ten years and has owned a home in the state for the last five. He has also has ties further back than the Cowboys: his grandfather, Ramiro Romo Sr., immigrated to Texas from Mexico many years ago, giving Romo Texan roots.

Clearly, taxes influence our choices and athletes are no different. That doesn’t mean, however, that every choice is about tax dollars or the sports landscape would be very different. Let’s face it: if signing on the dotted line was really all about tax positioning, we’d all be pulling for a team in Delaware.

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I know Romo takes the hit a lot which leaves many to believe he’s not that good. He is a very good quarterback and survives in Dallas because we have seen what Super Bowl winners look like. He has the look, but the team doesn’t overall. Dallas fans realize that there are a number of very good quarterbacks out there, but that’s just the start. A top notch line to protect the QB and give him time to throw is a must along with receivers than can snatch a ball out of the air and defenders’ hands. Well, it takes things Dallas hasn’t managed to keep healthy and playing at the same time.

They have been a strange team over the past several years. One year, a playoff bound steamroller and the next a struggling shell of the previous year.

Maryland taxes its residents at a top rate, which one gets to fairly quickly, of 5.75%. Then atop that there is a local “piggyback” tax determined by the county to which it is owed. Don’t know where you came up with the 2.75% you suggest as the local tax Flacco must pay, since the Baltimore County rate is 2.83% and the Baltimore City one is a still higher 3.2%. (On $10Ml that .37% difference would mean $370K more in just the local tax component.) Who would get that big chunk of tax money, would it be where he plays, M&T Stadium, which is in the city, or where he practices, which is in Owings Mills, which is in Baltimore County? Or would it be a matter of where he was domiciled? Would the different jurisdictions each have a claim to a portion of his earnings?

What about when these athletes do their thing in “away” games? Don’t they have to pay taxes to the state where they play on those days, which may be a good number of different states in the course of a year? When that happens, how is it decided what they earned in they are just visiting to play in for one or a few days, as in a baseball series? Is it a 1/365 thing or some other apportionment? How about a player that suits up, but sees no playing time?

And in general, how much of state taxes are about where one lives and where one works? The District of Columbia, for example, complains all the time about those who earn their livings there but pay no taxes to DC because they commute to work in the District from their nearby homes in MD or DC (sometimes WV). How do other tax jurisdictions handle the commute thing, do they try to collect taxes from those who work within their bounds though they don’t live within their bounds.

I am hugely interested in the state tax story, which gets much less attention than the “universal” one, that is taxes at the federal level, where it matters not where you live and/or work, including overseas, because it’s all the same in IRS’s eyes. (That may not be quite right since some other factors may come to play when the US citizen is living and/or earning abroad, but I think it is pretty close.)